Good evening, and welcome to the Texas Roadhouse Second Quarter Earnings Conference Call. Today’s call is being recorded. All participants are now in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to introduce Tonya Robinson, the Chief Financial Officer of Texas Roadhouse. You may begin your conference.

Thank you, Emma and good evening, everyone. By now you should have accessed to our earnings release for the second quarter ended June 28th, 2022, it may also be found on our website at texasroadhouse.com in the Investors section. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them. We refer all of you to our earnings release and our recent filings with the SEC. These documents provide a more detailed discussion of the relevant factors that could cause actual results to differ materially from those forward-looking statements, including factors related to the COVID-19 pandemic. In addition, we may refer to non-GAAP measures. If applicable, reconciliations of the non-GAAP measures to the GAAP information can be found in our earnings release. On the call with me today is; Jerry Morgan, Chief Executive Officer of Texas Roadhouse. Following our remarks, we will open the call for questions. Now I’d like to turn the call over to Jerry.

Thanks, Tonya and good evening. We are pleased with our second quarter results driven by impressive sales at our concepts. For the quarter, our restaurants averaged over $135,000 in sales per week. It was great to see that dine-in guest counts at comparable restaurants remained above both 2021 and 2019 levels throughout the quarter. It was also encouraging that our restaurants still average nearly $18,000 per week in To-Go sales, seeing our operators generating these sales volumes, both in the dining room and in To-Go is why our enthusiasm for the future remains as high as ever. In the second quarter, we saw our return to our historical seasonal sales trends, which we did not have in 2020 or 2021. As a result, we experienced a slight decline in our year-over-year total traffic. As the increase in our dine-in guest counts was offset by a decrease in the To-Go guests. We do not believe this reflects a change in overall demand for our restaurants. Rather, it appears that more people are getting back to their normal routines when it comes to dining habits, work schedules and vacations. Additionally, we believe that sales and traffic performance that we saw in the first four weeks of the third quarter supports a continuation of this trend. Despite the decline in second quarter To-Go traffic, we remain confident in our ability to execute a successful To-Go business. As our To-Go sales are settling in well above our pre-pandemic levels, we are investing in several digital and development initiatives to improve our overall long-term execution and ensure our To-Go guests receive the same legendary food and legendary service that our dine-in guests receive. At this time, we are evaluating our October menu pricing. As always, we will stick to our tried and true process of…

Thanks, Jerry. For the second quarter of 2022, our revenues increased 14% compared to last year, primarily driven by store week growth of 6.4% and an increase in average unit volume of 7.4%. Restaurant margin dollars grew 6.6% to $168.7 million and net income decreased 4.1% to $72.4 million or $1.07 per diluted share. The repurchase of 2.7 million shares of stock during the first half of the year benefited EPS, offsetting most of the percentage decline in net income. For the quarter, comparable restaurant sales increased 7.6% driven by 8.4% average check growth, while guest traffic declined 0.8% overall, dining room traffic was up 3.8%. Check growth includes positive mix of 1% driven by year-over-year improvement and the percentage of guests choosing a dine-in as well as all guests continuing to order higher-priced entrees. As Jerry mentioned, our restaurants averaged $135,000 in weekly sales in the second quarter, and To-Go represented approximately $17,800 or 13.1% of these total weekly sales. While our To-Go percentage declined throughout the quarter, we are comfortable knowing that part of this decline was driven by a year-over-year increase in the number of guests dining in our restaurant. By month, comparable sales grew 8.7%, 9.6% and 5.2% for our April, May and June periods, respectively. And comparable sales for the first four weeks of the third quarter were at 3.9% as compared to the same period in 2021. While the comp percentages softened in June and July, we believe this is more a function of the guest count trends that we are lacking from last year, rather than a significant change in the level of sequential guest demand this year. This belief is supported by our three-year comparable sales trends, which increased at a consistent rate of approximately 30% throughout the second quarter in July.…

Thanks, Tonya. We are fully aware that discretionary spending is being impacted by higher prices. But history shows that during times like these, Texas Roadhouse’s incredible value positions us to come through this period with increased guest satisfaction, and a larger and more loyal following. As we move into the back half of the year and plan for next year, we will first and foremost remain focused on our legendary food and our legendary service. We will remain fanatical about maintaining both our Heaping side and our Made from Scratch food. We will also continue to ensure that our restaurants are properly staffed with friendly and attentive roadies in order to meet all our guests’ needs. In closing, I want to thank our managing partners and their teams, and also our loyal guests, who drove our quarterly sales to over $1 billion for the first time in our history. We are highly confident in our operators and their ability to continue delivering strong operational results. And that performance, along with a smart and disciplined capital allocation approach will create continued growth opportunities for our roadies and position us to create additional value for shareholders over time. Operator, please open the lines for questions.

[Operator Instructions] In the matter of time, we ask that you limit yourself to one question and one follow-up today. Thank you. Your first question comes from the line of Brian Bittner with Oppenheimer. Your line is now open.

Great, thanks. Good afternoon. I wanted to ask about the cost side of the equation, it seems as though your food costs outlook is getting a little bit better than you originally were thinking when you talked to us last quarter. And that seems to be the other way around relative to your peers and how they’re communicating. So I guess the exposure to beef in the near-term is helping. But you said you expect it to spike again in the fourth quarter. So can you talk to us about how that frames how you’re thinking about beef for 2023 on the cost side? And the follow-up to that, I’ll just ask now is, we saw your COGS margin sequentially improved from the first quarter, which was – which was nice to see. How do you want us to think about the trend in your COGS margin moving forward?

Sure. Thanks, Brian. Yeah you know we did, we were able to moderate that guidance on commodities for the full year down to 12%, which felt really good. And a lot of it was driven by the fact that we were seeing beef costs soften across the second quarter. So that felt really great to see, especially after those prices spiking the way they did in Q3 and Q4. Some of that was offset too just by higher commodity prices across the basket. And I think that’s what you’re hearing a lot of other folks talking about right now, they maybe haven’t experienced beef inflation, are just those other line items we’re seeing in other proteins, like pork, chicken we’re seeing potatoes, some dairy items, bread mix, oil, things like that, it truly is spread across the – basket pretty evenly so as we look at the remainder of 2022. So we did think about what beef prices might be. And as we said, 70% locked on you know prices in Q3, only 30% locked in Q4. So there is some risk there, some uncertainty could go either way. But just you know as we’re hearing about beef supply, potential issues on beef cattle supply, how you know farmers are taking a lot of capital to feedlots right now and things like that. We’re kind of expecting there could be some – you know, that could just create some pressure maybe later on in Q4. So still remains to be seen. But that’s kind of how we’re thinking of it and can’t really give you a lot of outlook into 2023 on beef – other than to say a lot will depend on what that beef supply looks like, how that plays out in 2023, what the timing is. Obviously, as you all know you know if supplies get restricted that – that can have an impact. So we’ll see kind of what happens going forward. On the – I think the last question – part of your question, Brian was just about margin percent, especially on the COGS line, heading into the back half of the year. And I’ll tell you, you know you would expect them to continue to be a little higher, much like they were last year you know COGS kind of went up last year, where we’re coming off with those numbers and would expect to see you know still some pressure on that COGS line in the back half of the year compared to maybe what we felt so far this year is kind of the way we’re looking at it. We do have a little bit of beef deflation in Q3. But we expect that to kind of flip back around in Q4.

Thank you, Tonya.

You’re welcome.

Your next question comes from the line of Jared Garber with Goldman Sachs. Your line is now open.

Great, thanks for – thanks for the question and actually kind of follows Brian’s line of questioning. But more on the pricing side. Jerry you mentioned that you’re assessing your typical third quarter price increase and those conversations that you always have with your operators. It sounded like you’re taking a little bit more of a measured approach just as we think about the consumer being pressured a bit more broadly with inflation. So can you just give us a little bit more color on what the conversations with the operators are like right now and how your customer you know may be positioned towards the back half of the year to absorb another round of price increases? Or is there a reason you’re thinking that that may be – it might be time to pump the brakes on the incremental pricing? Thanks.

Yeah. And I think we will go into it from our side with a conservative approach as we have in the past. We will hear from our operators and see where the folks in our category are at, and then – and really try to make the best decision that we can for our business and for our consumer. And so we’re like you said, we’re in the early stages you know we’ve obviously shown in the – in the past too that we’ll do what we have to do if we feel like it’s the right thing that balances the business and but we’ll go into it with a conservative approach and see how these next 60 days kind of shake out once we hear from everybody, and we have the data and we see where our costs are at and – and then try to make the best decision possible for both parties.

Great, thanks.

Thanks, Jared.

Your next question comes from the line of David Tarantino with Baird. Your line is now open.

Hi, good afternoon. A couple of questions on the – on the sales trends you know. But I look at your performance, it’s holding up very well relative to what we’re seeing elsewhere. And I guess my question is, are you seeing anything under the surface in your business that would make you concerned about your consumer or at least a healthier consumer at this point, I know there’s a lot of crosscurrents. So wondering if you’re seeing any signs you know either trade down or – or otherwise that might give you a little pause at this point.

I mean, I would tell you from an operation standpoint, we really haven’t like we said it. It really has felt like we’ve got back to a more seasonal process we’re here at the end of July knowing that in the next two to three weeks people will be going back to school and changing a little bit of their routine. But you know I think that work habits and vacations it seems to have been kind of getting back to normal almost in some aspects. So from that we obviously the demand is still very high which is – which is great for us, the dining rooms are full and the consumer continues to be very hungry for our Made from Scratch and our hospitality in the restaurant. So, we feel good from that aspect just like you said, our demand is high for us, which is exciting.

I think too David as I’ll tell you, you know it’s nice the percentages can be a bit misleading because of what the noise and the crosscurrents as you mentioned, and when you look at average weekly sales dollars, it again like Jerry mentioned, it just gives you some confidence, because you see those continuing to grow year-over-year. So from that perspective you know feels good. And we see mix, we saw mix moderate a bit that was a little bit more from the shift back into the dining room a bit more and To-Go being down a little bit more, as you would have expected. So we still got a little bit of benefit on mixed mad, but the expectation would be, and we kind of thought in P6 and P7 that you know mix is moderating even a little bit more staying positive, but it’s behaving as we would have expected, and we’re not really seeing anything that would lead us to believe pricing isn’t flowing through or the consumer is changing their behavior.

Good to hear. And then Jerry, my – my follow-up is related to this. You know you were CEO the last time we had a major kind of prolonged downturn in consumer spending. So I was curious just to hear your philosophy on – on how you would approach a downturn, if we get one you know certainly there’s a lot of concerns about that in the environment. So just wanted to hear your thoughts on what you would do differently or not do differently if you were to get that scenario?

Yeah. And I said that the thing that so when it did happen, I was actually a market partner running a dozen restaurants in the State of Texas. And – and so I saw that we stay true to our Made from Scratch, our Heaping sides, our friendly service our – you know so as long as I know that we’re going to deliver on our promise and we’re going to do the things that that we were born to do kind of thing. And that is to provide every guest that walks through our door with the best value, the best plate of food, the friendliest place and – and an experience that they will feel good about. And – and that’s when you really have to earn it, their businesses when things are tough, because when they’re – when the money’s tight, they’re really thinking about where to spend their money. So we really have to over deliver on the experience, so that it’s worth it to them. And I think our strategy will always be to exceed our guest expectations, we’ll have to continue to look at our cost controls, our menu has many items, and we would – I would refer to them almost as country dinners that are very value-oriented to our consumers. So, we built that into the menu from the very beginning and to focus on those items that are extreme, good portion sizes and great value. So I think we’ll just continue to do the things that we do and try to over deliver on the promise. But you know I don’t want to get into any kind of shrinkage or reduction of our plate and – and you know but we – I think we can focus on our value-driven menu items, if we really need to go push that harder, but so we will overcome it. We will fight the fight and we will earn the business from our consumer.

Makes sense. Thank you very much.

Thank you.

Your next question comes from the line of Chris O’Cull with Stifel. Your line is now open. Chris O’Cull: Thanks. Jerry, you mentioned that a return to normal seasonality this summer has affected traffic. And there’s – there’s been a debate as to whether seasonality or consumer choosing spend less are the reasons for the weaker industry sales the past several weeks. But what gives you confidence the slowdown you’re seeing relates to a return to normal summer seasonality versus not having that last year? And – and then should we see an improvement in comp performance as school begins, as we start to have like-for-like seasonal patterns, I guess?

Well, I think we – if we go back and compare to what would be a normal year, which has been a while you know typically when school goes back in our week days soften up and our weekends get busier. And I guess that’s what we’ve been kind of studying over the summer, is that, we’ve actually seen both the weekdays and the weekends maintaining and holding, although a slight reduction, typically your – your flip, your weekends get a little softer during the summer, because people are out enjoying lake time and different things like that. So you know we – it’s kind of hard to really – are we completely back to normal? I wouldn’t say that. But it will be interesting to see as we go back to the school year this year with I would think most everybody 100% back in classroom and will the consumers routines get back to more of a normal trend. So it is to be determined I guess at this time, but I do know that typically you see a softening of sales in August, September, October a little bit because of the school transition. But we – we’ve always continued to be positive sales growth over the past so and we’re lapping some pretty big numbers just from that standpoint so I think the big number for the average weekly sales tells us a lot. More importantly, as there’s a huge demand, we just got to live up to the expectation,

I think too, Chris you know if you look we mentioned that three years stack number you know so kind of comparing back to 2019, which maybe was more normal. And you see a lot of consistency in that number. And so you know through P7, if you assume that continues in the back half of the year, that can give you some confidence on what comps continue to be you know in the back half of the year. So, some of it you know, you are losing a bit of check. You know we had that 4.1% price increase that we took in late October of ‘21. So, some will depend on what rolls back in from the pricing conversations that we have. And we do expect the mix to kind of moderate a little more in that flattish area in the back half of the year. And then it really just all comes down to traffic. Chris O’Cull: Okay, that’s helpful. And then another question, Tonya. The 10-Q last quarter, you stated that company expects the average investment the building – the building open at Texas Roadhouse location this year is, could it be about $1 million higher than what was spent last year? Is the company planning for this higher level of investment to continue into ‘23? Or are you considering changes to the prototype or something else to help reduce the investment?

Well, there’s kind of a couple of things going on in that increase. You’ve got you know the larger prototype is a piece of it. But then there’s also just the inflation that we’re feeling right now on equipment, building costs, labor, all of those things. So, there would be some expectation that those numbers would come down as we get through that inflationary cycle. And you know see that perhaps come back down a little bit would be the hope. We’re always looking for ways though to – to control those costs and you know manage those deals, things like that. We’re looking for the best deal on rent, we’re looking you know for all of those things, but really, right now, it’s really driven by inflation more than anything else.

Yeah. On the – on the Roadhouse side, the Bubba’s I think we’re probably digging a little deeper on things that we could do to maybe bring some of those construction costs down, we’ve got a few initiatives that we’re really trying to see. And I think we’ve got a few restaurants right now that have opened with a couple of the initiatives. But we anticipate by the end of the year, the full package of initiatives to reduce some of that without really changing the building is – will be in fact. And so then we’ll know right now, Bubba’s hasn’t increased any, which we’ve been able to kind of chew up the inflation on that cost. And we’ll continue to look at it and hope for maybe some reduction in pricing as we go down that road on it. But so a couple of more things on the Bubba’s side, probably more than Roadhouse when it comes to the building change or being able to pull some costs out. Chris O’Cull: Great. Thanks, guys.

Thank you.

Your next question comes from the line of Jeffrey Bernstein with Barclays. Your line is now open.

Great, thank you very much. First question was just on the restaurant margin for the back half of the year? Seems like you have a pretty good line of sight into commodities with your tempered expectation. And on the flip side, maybe a little bit more labor. And you know other than the pricing, which is unknown, but how do you think about restaurant margins for the second half of the year? You know do you have intention to return to a certain target? Or better yet? Just what’s your expectation for the back half on that blend of all those puts and takes?

Sure. I think you know as we see sales return to some normal seasonality, I think margins kind of go that way too and Q3 and Q4 are typically some of our, you know lowest margin quarters. So I think there’s kind of that starting point for the rest – the back half of ‘22. And then you know a lot just depends on where some of these inputs land, you’re continuing – besides commodity and labor, you’re continuing to see you know costs going up a bit and the other operating line, the utility costs, those types of things continue to rise. And – and I could see you know that that continues to be an impact in the back half the year. And you know where we land on pricing has an impact you know on what margins might look like and how traffic fits into that. So, I think there’s still a lot of moving pieces to it. I think margins are going to be pressured in the back half of the year and – and we’re going to see that continue. And so we’ll just see kind of how that plays out. I still feel good, Jeff, to your point on you know being able to get back to 17% and 18% margins, that’s always our goal. At some point in time, a lot of that expectation of when that happens, it’s just going to be driven by the commodity outlook and labor outlook and – and you know what sales continue to look like and feels like that you know don’t know if that’ll be a ‘23 possibility. You know it’ll be great if it is, but that is still definitely a goal and we think it’s achievable.

Understood. And then just a follow-up, Jerry, you talked about the restaurant pipeline and feeling pretty good that all things are under construction. But a couple could slip I guess into ‘23, which is totally reasonable. But as you think more broadly about ‘23, have you seen additional available real estate that intrigues you maybe there would be an uptick from the 25 openings between Texas and Bubba’s? Or are you kind of keen to kind of stay more in that mid-20s rather than pushing to 30 or higher? I’m just wondering what your early thoughts are, I know, you don’t have all things signed and delivered. But just your thoughts on unit openings in ‘23.

Yeah, I would tell you the pipeline looks pretty solid, I would tell you we’d be higher than – right now it looks very optimistic, we have quite a bit prepped up and ready. And not including if anything from ‘22 pushes. So we’re focused on trying to get to that higher end in ‘23, there have been some really good deals out there where our guys have been working really hard to bring us some opportunities. So, I feel very optimistic that you know it’s – and like you said, it’s a little bit more expensive to do business. But as far as the real estate availability and where we want to go, it’s available out there, and we’re being aggressive on it, and I can tell you that.

Great, thank you.

Thank you.

Your next question comes from the line of Peter Saleh with BTIG. Your line is now open.

Great, thanks. I want to come back to the conversation around you know consumers and the behavior there. I think in the past maybe several quarters or so, you were seeing consumers still trading up from some of the smaller steaks to larger steaks. Just wondering if you’re still seeing that or if you’re seeing any signs of check management at all you know a reduction in appetizers, drinks, desserts, anything of that sort would be helpful.

Yeah, you are still seeing that a little bit, Peter on – on the entrees, you’re seeing a little bit of that shade up. Probably you know if you’re seeing any softness on mix, maybe alcohol, the number you know, the alcoholic beverages you know a little softer. But we’re still seeing a bit of that even though we’re lacking some pretty strong numbers of that happening you know last year, so we’re still seeing a bit of that not really anything you know within the food categories that would signal you know anything happening. So, that feels pretty good.

Great. And then can you just remind us, Tonya what the – what the one-year comps were last year in July, August, September, just the way we have a good comparison for this year?

So you want that comp sales last year –

July, August, September –

Breaking down by month for the quarter?

Yeah, yes, please.

Yeah, let me see let me make sure I’m giving you the right numbers here. So, those numbers the last year were 44.1% in July, 29.8% in August and 20.7% in September.

Great, thank you very much.

Your next question comes from the line of Eric Gonzalez with KeyBanc. Your line is now open.

Hey, thanks. Good afternoon. I’m wondering about the off-premise business. You know you don’t play the third-party arena, which I believe does give higher income. But I was wondering how the – how the customer profile of your takeout guests might compare to that of your dine-in guests. And which you would say is a little bit more vulnerable to some of the macro headwinds that seem to be playing out across the industry. And if we were to enter significant economic downturn, would you expect to see to take out business slow before the dine-in business or vice versa? Just wondering how you’re thinking about that? Thanks.

Yeah, it’s a great question. You know I don’t know that we know yet. I think it’s been interesting to see as the dining room traffic has slowed down a bit. You see more folks maybe moving from To-Go back to dine-in. I think some of that is just a function of being able to get into the restaurant in during the week, because you know wait – sometimes that is so long I think that was maybe helping the consumer decide on the To-Go transaction rather than waiting to get a seat inside the restaurant, I don’t – I don’t think there is a big difference between those guests as far as what they spend, the mix of what they’re you know or anything like that. I mean, it seems very similar as far – obviously you don’t have the alcohol transaction on To-Go, but otherwise seems very similar. So from that perspective I think all good. But I think it just remains to be seen, I think the guest likes the convenience of To-Go, is really what we’re seeing. And the technology that we’ve added to that transaction makes it very convenient. The way they can come to the restaurant and pick up that order is very convenient. So I think you know just with the way people live these days, that – that continues to be something they’re going to look for and seek out. So it’s kind of the way we would look, we’re – we’re very focused on continuing to drive those To-Go sale.

Yeah and Eric, and just to give a little confidence on that. Currently, all summer long in our restaurants, we’ve been working on what we call Mission Statement University and it’s rolling out the online ordering switchboard system which helps integrate our dining room orders or basically our To-Go orders whether it be a walk-in, a phone or an online a little easier and smoother transition into the kitchen. So that it’s giving our operators a little bit more confident that they can handle more To-Go business without it affecting the dining room. So we’re – we’re very excited and we believe that this software and the education of our operators will allow us with confidence to be able to take more orders in every 15 minutes segment. And so that’s going on out in our restaurants right now. And obviously we feel great about our windows and our pickup process and even our order process. This – this is more about our operators feeling more confident that they can handle the To-Go business successfully, without it affecting their dining business. So this has been some – an initiative that we’ve been doing for the last seven or eight weeks. And we’re very excited about our product coach team and our service experts that are out there teaching and coaching. I just personally have witnessed two, one in Connecticut and one in Florida and Panama City, myself. And it is just – it is a great experience for us to watch our operators learning how to execute at a higher level when it comes to dining room business and To-Go. So we’re – we are very excited from an operational standpoint, that we’re going to be able to execute To-Go and continue to get better at that experience for our guests.

That makes sense. Thank you.

Thank you.

Your next question comes from the line of Chris Carril with RBC Capital Markets. Your line is now open.

Hi, thanks for taking the question. I wanted to ask about in restaurant capacity in your existing restaurant base. You noted the larger formats of restaurants in development, as well as guest counts above 19 and 21 levels. And then we’re seeing I guess, off-premise mix moderating a little bit where you’re shifting to on-premise. So, how are you thinking about meeting demand in the restaurants for that?

Well, it’s interesting when you look at the comps anyway you know the – typically and we continue to see this, the most successful restaurants are the ones that continue to drive traffic. So they’re finding ways to continue to bring guests in the door, they may be getting a bump out adding seats. That might be one way, other ways though they’re doing it you know just their seat utilization and – and bringing folks in on the shoulder periods and things like that. So they continue to find ways to drive – drive that traffic. It’s – it’s always interesting to see. So I don’t know that we would ever say we have a store that is maxed out capacity or anything like that. I think they – they continue to find great ways to do it.

Got it. And then just for my follow-up, I wanted to ask about labor costs. And maybe if you could provide any additional detail on the outlook there. The wage and other labor inflation outlook is maybe a little bit higher than what you provided last quarter. So curious as to how you expect that? Are those inflationary trends are going to play out over the remainder of the year? Thanks.

Sure, yeah you know most of the wage inflation you know that’s built into that 8% guidance, a lot of it occurred in Q1 and Q2 you know it was – it was over 10% in Q1, 7.7% in Q2. And so a lot of that was – is what really drove that guidance a bit higher you know for the full year. We expected you know as we started lapping higher wage rates in the back half of the year, we thought they might – that growth might moderate a bit in the back half. We’re now – we still think it will moderate but not maybe not as much as we were originally thinking. So, I think you know we have a big focus here on making sure our people are taking care of doing the right thing, staffing at the levels we need to staff at and you know so for us, it’s really that investment in our people is something that you know we want to continue to do. And that’s you know a big focus of ours. So, I think the trends in the back half they’re just – they might be just a touch higher than what maybe we expected them to be. But more of it was really what the expectation that we saw in Q2 was a bit higher. It’s really what drove that.

Right. Thanks very much.

Your next question comes from the line of David Palmer with Evercore. Your line is now open.

Great, thanks. Good evening. Question on the food costs just to follow-up on some of your other comments. You mentioned, Tonya that I think that you thought that these prices might be down in the third quarter. And I think your guidance implies for overall food costs for the second half, the overall basket would be up 9% plus, I think or something like that? So I’m trying to piece that all together, it’s not often that you have a comment about your beef that’s going a different direction than your overall basket. But you did mention that things are going to come back up for beef in the fourth quarter. So my thinking is, you’re really talking about you know very different quarters over the next two quarters. And then that there’s something else going on beyond what we would see say an earner berry with regard to the steak cuts in your basket, maybe distribution. The other thing, so love any color about that.

Sure. You know some of it, David that have to do with what we’re lapping for last year, Q3 was really where we saw that large spike in increases. Ribeye was one of the cuts that you know we saw a huge increase in costs last year in Q3. So some of it is just you know kind of what we’re lapping. Actually you know you referenced about 9% in the back half of the year that is about what we are expecting pretty equally across quarters. So you know even with some minimal – and it feels great to say beef deflation by the way, but it’s pretty minimal. So even with some minimal beef deflation, you do have other parts of the basket that are continuing to see higher cost you know your other proteins are seeing it. All those things I mentioned earlier, bread mixes, oils, potatoes, some dairy items. So you really are seeing more across the basket outside of even beef than we’ve seen before. That’s kind of doing that. And then the movement to a higher beef product. Again, it’s pretty minimal in Q4. And it’s just really based on only being that locked 30% on fixed prices. So we’re just kind of anticipating that cost could get a little bit higher in Q4, just if there are any supply restrictions, things like that, that start coming into the system kind of what we’re thinking.

Thanks for that. And then just a follow-up on the pricing stuff. The comments that you made and the trends that you have would seem to suggest that you have pricing power you – your three-year trends are quite firm, and you don’t seem to be seeing any major cracks in terms of trade down. I’m just wondering about any other inputs that would make you give – give you pause about raising price? Is there anything going on with the competitors where they’re discounting? Or are you, you know just listening to the news reports about maybe what’s around the corner? You know any anything about your mindset that would make you question your ability to raise price? Thanks.

I wouldn’t question. At this point, I still want to really get educated as to what our costs are going to be and hear from the operator. So you know we’d go into it with a conservative mindset, we obviously look at the numbers deeply. And then we make a decision that we believe is best for the business in a balanced procedure. And you know obviously it’s a difficult time because you hear inflation in all of these different areas. So you know we will pay attention to what we believe is important to take care of our consumer, we do pay attention to what’s going on in the industry and even in the grocery store. So you know we have to, we will and we have, we don’t want to, but you know I think we have – we know that we have to do something I just don’t know where it’s going to land right now.

And David, I’ll tell you, you know we still believe in you know the philosophy that commodity inflation is cyclical and commodity costs are cyclical. So while you – we are feeling some significant inflation right now that cycle at some point will turn. And so that philosophy hasn’t changed and you know that just means we may take it on the chin a little bit more during that short-term cycle and count on the guests being loyal and coming back to us and that’s what we’ve done in the past and it’s really benefited us so.

Thanks.

Yep.

Your next question comes from the line of John Glass with Morgan Stanley. Your line is now open.

Thanks. If I could just first ask a follow-up on the question about margins – restaurant margins in the back half you know typically in many years prior to COVID, the back half margins were about 200 basis points below first half margins for the seasonality reasons you know we discussed. Is there any reason to think this, you know I understand you’d make a pricing decision yet in the fourth quarter, but can I kind of know what pricing is in the third quarter? So is that a reasonable starting point to think about back half restaurant margins being down a couple hundred basis points for the first half? Or is there a reason not to think that way?

No, I think that’s a good starting point you know, John. I mean that’s kind of as we head back into some normal seasonality we’re going to be looking – we’re looking at historical trends to have, you know what does that look like from a margin perspective? So, I don’t think that’s unreasonable to start there. And then it’s just really looking at you know how much pricing are we going to be taking? What do we think traffic trends can continue to be? And where do we land on some of these cost inputs? All of that, obviously, a lot of moving pieces for sure.

Yeah, now, I appreciate it. It’s just that I don’t think consensus maybe is considered that yet. Jerry, can you talk about technology more broadly at one point, and forgive me if this is a misremembering, but KDS was something that was being tested? Where are you on that? If I have that, right? What are the important things I know you talked about To-Go, but other technology pieces that you think about for the next 24 months? And how they might impact the business?

All right, well, thanks. I’ll give you an update on our Roadhouse Pay which we currently have over 300 stores and at the stores that have it, there’s an 82% usage in the concept. So, that is very exciting that the pay-at-the-table, the consumer is using it, it’s helping them turn tables a little quicker, because you know you’re right there you take care of your pay up. So we’re very excited about our Roadhouse Pay, and hence the rollouts are going very well, the Digital Kitchen, as you know, we opened a new store in Shakopee, Minnesota, I believe in the early part of the year, we just completed our conversion of an Austin, Texas restaurant. And right now, the feedback is very positive, food quality, kicking times, no loss tickets, easy to train employees. So, you know it seems like we’ve got a lot of real positive feedback there, I was just talking with my chief tech guy earlier about that success. And what we are going to look at for not only the fourth quarter, potentially or even into 2023. So there is definitely some demand for the Digital Kitchen. We also, again, as we talked about the online ordering switchboard, that we’re out there training in the restaurants right now, we have all of our market partners coming to town next week, and we’ll be doing a training session on that. And we want – we want to be able to execute To-Go not only for our guests, but we want to have tools that are available to our operators that not only give them confidence to take more orders, but to execute at a high level. So, anytime we can use technology to enhance the guest experience. Those are the top three right now that we are currently having success with and excited about to continue going forward.

Got it, thank you.

You’re welcome.

Your next question comes from the line of Lauren Silberman with Credit Suisse. Your line is now open.

Thank you very much. I have one on the consumer. Are you seeing any differences in behavior with the lower end consumers specifically? And given your strong value proposition, any sense you’re getting benefit from trade down from higher cost restaurants? Any color that you can give on the demographics of your average consumer would be helpful.

Yes. I don’t know if I can answer that on the low end consumer. We really don’t track it our guests that way. So it would be tough for me to comment on that. I think overall you’re absolutely right, the value on the menu I can see being very attractive to a guest who’s looking to manage their, you know what they’re spending. So there’s a lot of great things on the menu that fall into that wheelhouse, which is really awesome. We have the early dine, which is you know coming in and those earlier hours of the day part and great options there that provide some value on the menu too. So that’s really great. And I think speaks to that consumer probably. I’ll tell you when we – you know the last recession we had we do believe we saw some of that trading into our – get into our restaurants from the higher end guests maybe who was used to paying more of a higher PPA. And I think when they tried us, they realized how good the food was, and they didn’t leave. And that really is what helped us with that 10-year traffic growth trend that we had. And so, we still believe that – you know, that is possible and that happens. And so that’s something definitely that we’re thinking about you know of how we continue to, to speak to that guest and bring them in.

Great, thank you. And then just on dine-in, really strong growth in dine-in traffic this quarter. Where are you running on dine-in traffic versus ‘19 at this point?

Dine-in traffic versus ‘19 on a three-year trend, I don’t know that I have those numbers in front of me, actually. But I think you know we’re still seeing some really good trends. If I go back and look at kind of what traffic was for Q2 in 2019 you know you’re looking at 4.7%, up in 2019. On comps traffic was running about 1.7%. So you know we were seeing probably in that 1% to 2% range of traffic growth in 2019 each quarter kind of what we were running back then.

Great, thank you very much.

Your next question comes from the line of Jon Tower with Citigroup. Your line is now open.

Great, yeah. Most of my questions have already been answered. But I guess I’ll hit on. In terms of you know knowing right now that you’ve got these potentially higher beef supply assuming lower beef supply coming in ‘20 – late ‘22, 2023, I think the USDA is forecasting a 7% or so reduction in production. Is there anything you could do or proactively do right now with the knowledge in hand to address this maybe it’s you know lock in some supply earlier than you normally do for 2023? Maybe there’s some technology like you’re mentioning about the KDS pushing that out across the system faster? Or that even pricing, I’m just curious what you might be able to do now knowing that prices next year might be taken off again.

Yeah, from a supply perspective, I mean you know you could certainly lock up additional supply that’s not necessarily going to help you from a cost perspective. But it would you know help you kind of lock that up, we do a great job of locking up supply even when we can’t lock price. So right now you know you’re not getting a lot of takers on locking up prices too much. I think there’s just still so much uncertainty out there as far as what may happen in the future. So, not really seeing an opportunity on price, but you could see it on supply. You know we have never approached you know higher beef prices by changing something on the menu or moving a focus away from steak on the menu. So it’s really not who we are, our menu is so tight. It’s – we don’t add a lot of items. We keep things front and center and our guests they have their favorite things. So I don’t know that there was much there we would do either, John, to be honest as far as making significant changes. We have added things in the past though like a salmon salad or you know things that we feel like give our menu some variety you know and things for you know to kind of avoid that veto vote. I think some of it, you just kind of have to write it out. And you know and see kind of where things land and what to try. And you know how long that cycle might last.

Got it. I will – I just want – I was curious if you could clarify I think you said something about the store margins in the back half being 200 basis points lower than first half. I just – I was curious if that was accurate? Or if I misheard something. I want to make sure that’s – that’s [technical difficulty] correctly.

Yeah you know I think the reference was to 200. You know, if you go back to 2019, it’s probably the closest date you could really see more of that normal trend. You know and just to give you margins by quarter from ‘19, it was 17.9%, 17.6%, 16.7% and then 17.1% as you look to the cross from Q1 to Q4. So again, you do see some of that softness you know in Q3. A lot is just going to depend on commodities, really and where that inflate – you know you pick – you could pick up leverage if some of that supply doesn’t pan out maybe you, you know, you see some continued softening on costs. You could see traffic come in higher you know pricing, all those things just come into play. So I would say it’s kind of hard to read a lot into it, but there is no doubt that margins typically are softer in the back half of the year for us that’s just the typical trend.

Okay, great. Now that makes sense. I just want to make sure I didn’t mishear anything. Thank you. Appreciate it.

I appreciate it. Thanks.

Your next question comes from the line of Andrew Strelzik from BMO. Your line is now open.

Great, thank you and good afternoon. I had two development-related questions I guess. The first one, you talked about last quarter, maybe some opportunities to accelerate or better navigate, I guess, the development process and you start development process. I know there’s still some delays going on. But – but have you been successful in realizing some of those opportunities? That’s the first question. And number two. When you talked about the – the larger prototype having more storage and coolers to help meet demand, what are you doing in the legacy stores to kind of manage that same thing? Is there any need to I don’t know if it’s you know investments or what have you to kind of retrofit that, but – but how are you going about that – about that in the legacy stores? Thanks.

Yeah, I will tell you. You know so we continue to look at the development, we have learned a lot, we’ve obviously extended out our timelines, I feel really good about where we’re at. There is you know, there’s one item right now that we are concerned about, because we can’t open a restaurant without power. And there are some transformer concerns out there. But we are having a backup plan to be able to do that, but you’re on temporary power, and we can pretty much overcome a lot of obstacles. That one concerns me a little bit. But I do believe that pipeline is, we are coming up with a backup plan, if needed. So I think everything else we’ve kind of learned how to navigate through some of the permitting in the different extended time periods. As far as the new or the existing stores and – and whether it be a cooler expansion you know we’re looking at some of these really high volume restaurants and evaluating what they need to be able to handle that and whether it’s more seats, more cooler space, more storage. So we have some we’ve done some very cool things with some of the existing prototypes, we relocated some restaurants that have had a lot of success that at the end of their lease so we move them just in a close proximity, but they get more parking, they get a brand new building. So, relocations have been very successful, we have numerous on the books again for next year, as well as this year. So we’re looking at our very top high performers, and what we can do to help and support them. Because it just smart money to spend no doubt, because the volume is there.

It makes sense. Thank you very much.

Your next question comes from the line of Jeff Farmer with Gordon Haskett. Your line is now open.

Thanks. I’ll be quick, given the hour. Just two real quick ones. Anything you can share, Tonya on how hourly employee tenure or turnover levels have shifted versus pre-COVID levels? So where do you guys stand now on those two metrics, tenure and turnover versus pre-COVID?

On the hourly employees, you’re actually seeing a bit of return to normal, more normal turnover levels you know more of those pre-COVID levels. So we had seen you know turnover you know creep up on the hourly side to 140% or so. And that’s been coming down more in line with that you know 130%, high 120% range, and everybody calculated differently, but we’re pretty consistent in the way we do that. And – and it feels good to see those. I think we still have some work to do, our operators would tell you, but we do feel good to see those get a little more in line with things. So, on the management side of things you know you continue to see improvement there to returning I think we’ve actually have gotten back to pre-COVID level – levels from a manager turnover perspective. And most of that isn’t at the MP level. Usually that we’re seeing that more at that service manager, kitchen manager level.

All right, that’s helpful. And then just taking a stab here, but anything you can provide or any color or any sort of framework for how we should be thinking about G&A and G&A dollars in 2022 sort of finishing out the year?

Big picture strokes.

Sure. Well you know yeah, we had that you know. You have that mismatch of cost on conferences we talked about. Outside of those things, it’s – it’s pretty – it should be pretty consistent from a dollars perspective across each quarter in the back half of the year. So would be our expectation. Typically, you see a little bit you know in ‘21 you see a little bit of increase in cost in Q4. A lot of times that’s been driven by bonus payouts as we get to the end of the year and paying out based on full year performance and with ‘21 being so much significantly higher than ‘20 coming off that – that year, a little bit more of a pop there in Q4 ‘21, than maybe what we’re expecting you know as we head into the back half of the year. So I think you probably, Jeff would just expect to see a little more normalized trend from a dollars perspective when you actually beg out that – that mismatch on conference.

Okay, thank you.

Your next question comes from the line of Brian Mullan with Deutsche Bank. Your line is now open.

Thank you. Just a question on capital allocation. You know step up and share repurchase this quarter you know really this year has been notable. My question is, Tonya, how do you want us thinking about this? You know we know Texas Roadhouse is always going to keep a conservative balance sheet overall. But are you also in some way expressing a view that the stock is undervalued right now? And if that’s the case, would you be willing to keep up this pace for a while longer?

Well I think, Brian what we saw was just some opportunity you know earlier in the quarter to really take advantage of kind of what was going on in the markets. And we had some excess cash that you know with – we knew what development was going to be and what – what we were going to need from that standpoint, and we felt very comfortable bringing our cash balance down. And net cash you know, $75 million in debt on the books. But I would say that doesn’t indicate a change in our, you know principle or the way we’re thinking about share buybacks, I think you’ll continue to see us be you know looking dilution and shares that are being issued, we’ll continue to see you know what we can do from an opportunistic perspective. But right now we feel really good where we are from balance sheet perspective, where cash is sitting and the amount of debt that’s outstanding. So from that perspective, I think we feel like we’re in good shape.

Thank you.

Your next question comes from the line of Dennis Geiger with UBS. Your line is now open.

Thank you. Just wondering if there’s anything unique that you’re seeing by geography or any notable difference in performance across certain markets? Thank you.

Not too much really significant fluctuation, pretty much behaving as you would normally expect it to you know at this time. You know I know, you know there’s been you know talks of you know the COVID spikes and COVID occurrences and things like that, but those are really hard to read across the country and what that impact might be. So, we haven’t really put a lot of energy into trying to see what that might be. But pretty much the same as what it normally – normally looks like, Dennis, as far as you know just how comps are growing. We’ve got strong stores all across the country.

Makes a lot of sense. Thanks, Tonya.

Your next question comes from the line of Andy Barish with Jefferies. Your line is now open.

Hey, guys. Thanks for taking the question. Wanted to go back to, Jerry, to your comment. You were talking about implementing some software on To-Go? Do you – does the business put governors you know kind of on To-Go just given a lot of that demand comes you know in busy sort of Friday, Saturday nights as well? And is that what you were referring to as an opportunity to kind of you know free up some throughput there?

Yeah, so we, every 15 minutes, we can put a little baffle if we need to. We, you know, so that is a part of it. So the software helps blend or mix that in so that we can handle depending on how many tickets we have hanging from the dining room depends on how much we can do successfully on To-Go. So yeah, the software helps, it mix a little smoother and easier. And just the education of we can take more orders based on the smooth transition of just allowing the guests to you know even if they have to get pushed to another segment, it’s not too far. So knowing that instead of saying no, we may have to push you to the next bucket. And we have a little bit smoother transition in doing that. But it – it has really been working well for us, given our operators more confidence so they can do more orders.

Got it. And then – and then, Tonya on the – you know on the beef purchasing and contracting side. I know it’s gotten a little bit more opaque over the years. Is there a way just thinking about sort of ‘23 and the potential for higher costs there to start blending in some of that with the back half of ‘22? And is that informing kind of some of your decisions or some of your discussion today on you know on beef costs and maybe you know maybe ‘23 doesn’t feel as much of an impact as potentially could be out there?

Well, I mean you know we do have some ability just based on how we age our beef to buy you know if there’s some opportunity to – to buy some things you know a little further out or a little sooner, we have that ability to do that. But you know all of our – all of our steaks are kept fresh in the store, and there’s not – we don’t have any frozen meat. So you know from that perspective, it’s hard to kind of buy ahead of time and use it later in the restaurants. I don’t know if that Andy was what you were referencing or if there was – or if I missed the question.

Yeah. It was just more of a contracting strategy rather than you know taking – you know taking physical you know product.

Yeah, I do – okay, I do understand that. Yeah and we have never really utilized those hedging – hedging you know ourselves internally, we kind of rely on our suppliers and things like that to that. But that is something we’ve looked at recently to see if there is some opportunity there to you know to utilize those – those strategies and maybe get ahead of things a little bit. So we’ll see if that pans out.

Okay, thanks very much.

Thank you.

Your next question comes from the line of John Ivankoe with JPMorgan. Your line is now open.

Hi, thank you. Also a question of on To-Go, at least you know from what I’ve heard on the call a lot of it really you know the changes that you’re going to make are very much focused on the operator and giving them you know more confidence to hit just certain ticket windows. But I was hoping you know I guess if you could elaborate you know if there any changes beyond that, if there are changes that the customer themselves may see or notice, and you really see how you know Texas Roadhouse is significantly differentiated you know than some of the peers you know certainly I’m not expecting you to get back to what you did during COVID, where you know you’re a completely unique experience you know relative to everyone else. But I was wondering you know how you could stretch or move the brand to do a takeout experience that the customer will notice that may – maybe others in a segment simply are not.

I don’t know that there’s anything magic out there right now. I think our convenience of the – of the To-Go pickup windows, probably even the ability to come in the restaurant without having to go through the – the host area is one of the significant changes that we made, more of what we’re doing is the flow of our To-Go food to get to the Packers, where they pack that food up so that we can become more accurate and make sure that you know it’s critical that when that guest gets home, they have everything that they expect or wanted. And so that’s more about what we want to be the convenience, I think we’ve done over that through the pandemic, the whole pickup experience, the ordering experience, I believe is very solid, we really have done a great job, I just want to continue to give my operators the simplification of how to get it packed right and how to make it work when you got a full dining room. And to have that confidence that they can do both at a very high level.

And I think too, John, sometimes the guests you know feels maybe a little frustrated because they do – they do have to wait for that To-Go order. And so what Jerry’s talking about too to get that food in the hands of the guests even faster by getting them kind of blended into the – to the dining room queues with the dining room guests. So from that perspective, they should see that as far as just do when they order, they’re not given you know an hour wait time maybe they’re getting it a little bit faster.

Got it, understood. Thank you.

Your next question comes from the line of Jim Sanderson with Northcoast Research. Your line is now open.

Thanks for the question. Just wanted to follow-up on pricing strategy again. Do you have any feedback or sense of how your competitors have reacted to the price and you’ve taken market today and whether that has narrowed the value gap or value position you have in the market?

I think in some ways you know that’s something we definitely pay attention to whenever we have our pricing decisions typically you know we’re talking about it in February, March and again in September, October. We’re definitely looking at what the – what the guests or what the competitors are doing. And we want to make sure that that gap that we’re keeping you know that value and that gap with the consumer so. It is definitely something we’re watching, Jim, I couldn’t tell you off the top of my head who’s kind of got what pricing or anything like that, we actually dive into it a little bit more than that. And our operators kind of bring to the table, the pricing in their areas and their markets, because it is so different across the country. So we actually go a little deeper on it and don’t look at it as much from a high level perspective.

Okay, and not noticing anything kind of significant or meaningful that would make you want to pull back on your thoughts on pricing based on what competitors react?

Nothing. Yeah, nothing from a competitor perspective at this time. Again, we’ll dive into it more on the upcoming call. Yeah, for sure.

Just a quick follow-up. I think on the 3.9% comp for July. What’s the underlying traffic trend for that comp number?

Well there’s about 7.2% pricing – 7.3% pricing in the menu throughout Q3, so you can kind of use that to back into what’s traffic trend, we typically don’t give out specific traffic trends on a monthly basis.

All right, thank you very much.

Your next question comes from the line of Brian Vaccaro with Raymond James. Your line is now open.

Hi, thank you. Just a real quick one on labor. I wanted to ask on labor deployments, specifically, you know the average hours per store. Are you happy with current levels and able to achieve your targets for ops and the guest experience? Do you expect to continue to add hours year on year moving through the second half? Thank you.

I think you know, Brian, a lot will just depend on what that traffic growth looks like, that’s always a big driver, what growth in ours is going to be? You know and I think you know the – the operator right now, I would tell you, they want to be staffed and they want to be staffed for any call outs and they want to, for any unexpected changes and you know in the schedule and things like that. So they’re probably going to you know move a little bit more towards being very well staffed, that could lead to a little more growth in hours versus what traffic looks like. But I’ll tell you, me as the CFO, I’m okay with that. I like that investment in that line. And – and we know that that legendary service really adds to the experience. So we want to make sure that’s happening. But you know, I think for the operator, it’s tough right now from a staffing perspective and just knowing what you need and what those sales levels are going to be and things like that, with just all the kind of lumpiness that you see lapping last year. So, there’ll probably be a little more leaning towards growing ours a little bit more.

All right, thank you.

Your next question comes from the line of Sara Senatore with Bank of America. Your line is now open.

Thank you. Just a couple of quick clarifications. The first is on the comp trend. I know you mentioned July running around 30% versus 2019. I guess if I just track that 3.9% out through the quarter, it would imply something less than 30%. So just on a three-year basis, July sounds like it was the toughest comparison. And so we – you know as we look at that 3.9% maybe it could get better through the quarter if that – if that three-year stack holds. So that was my first question. Make sure I’m interpreting it correctly.

Yeah, I mean, like we’ve been talking about season – from a seasonality perspective, you start to see that softness in July and Q3 tends to be where you see more of it than anywhere else. So I don’t think it’s unreasonable, Sarah to think that that 3.9% you know, it could be the low point. A lot again will just depend on pricing is pretty consistent throughout the quarter. Again, it’s 7.3%. Some depends on where mix lands and you know if we continue to see it be flattish or we get some benefit there. And then you know on the traffic side, dining room and To-Go so that I don’t think you’re being unreasonable in your, you know kind of how you’re looking at it.

Okay, thank you. And then sorry just the second question is, I’m sorry to belabor the point about the seasonality of margins. But this year seems kind of unusual to me in the sense that you have so much less inflation in the second half than the first half. So the guidance implies you know inflation comes down by 300 or 400 basis points sequentially. So I, that’s pretty atypical I guess is what I’m asking, you wouldn’t normally see that. So maybe the seasonality on margins isn’t quite as relevant this year?

Well it’s really tough to say because you kind of have to – because of the volatility and you kind of have to look at it on a two-year stack. I think that might help when you’re kind of trying to forecast what the back half of the year margins might be. So you know looking at the cost of sales percentages you know, they’re going to continue to be a bit elevated you know in the back half of the year and you know I think the expectation would be that some of that seasonality does come into play in the back half you know that we typically would see with the margins being a bit lower.

Right, understood. Thank you.

Thanks, Sara.

Your next question comes from the line of Jake Bartlett with Truist Securities. Your line is now open.

Great, thanks for taking the question. You know I’m sorry if you – if you’ve answered this before, I didn’t either – maybe register it. But I want to ask whether staffing is at all you know has been a hindrance to sales growth? I mean you know another one of your competitors last night talked about the COVID resurgence you know impacting the availability of staffing people calling in sick. So I’m just wondering whether – whether the staffing has been dampening sales to you know maybe to a greater degree than it had you know in the first quarter? And then the second question is separate, and it’s on Bubba’s. You know it looks like you’re opening or trying to open a handful of Bubba’s stores this year. But I’m just wondering your competence I know you’ve been working with Bubba’s for a while. And you know at some point you’d expect it to be kind of in the high single-digits for Bubba’s development. You know is that something that you think we could expect for ‘23? Are you – are you there in terms of kind of really starting to ramp up Bubba’s growth?

Well, I’ll take the first part of that question, Jake on you know kind of how we’re thinking about staffing? I would – I would say staffing is probably easier today than it was back at the beginning of the year. And you know but you still would probably have operators out there telling you even today, it remains you know a challenge for them. So, it’s definitely a little bit, you know it’s not one-size-fits-all across the country, a lot just depends on where they are. But, I think definitely it has gotten a bit easier than it was at the beginning of the year.

And I would just say that I think with the – with our turnover lowering, that means that where our people are getting more experience, so they’re able to do more so which is great, I think from that standpoint. So I do believe that we’re in still, this quarter were better than last quarter on the staffing side, I think it’s helping all across, there are still a couple of pockets that probably need a little more attention and help, but overall, again, continue to head in the right direction through the second quarter. And as far as Bubba’s you know I am very confident that we’ve got some leadership we’ve added you know made a little change in the leadership, added some – some multiunit focus, have gotten a real clear vision of what we want and expect. I’m very proud of the food, I really do think that the Bubba’s food is really living up to our expectations. We have a service expert that’s now leading a team to – to help us really ramp up our level of legendary service and – and so as far as building a leadership team that can help carry us into the future so that I have more confidence in building more restaurants. That is really what we’ve been working on for the last nine months. And I feel really, really confident with the team going forward. They’ve gotten a real clear vision and focus and they’re coming together as a team, not only the managing partners, the market partners, our VP of Operations, the team is looking really good for growth. So I’m very excited about it. I do believe that I am going to be able to rely on them to produce more end to grow more in – in the coming years.

Thank you very much.

Thank you.

There are no further questions at this time. Tonya Robinson, I turn the call back over to you.

Thanks, Emma and thanks, everybody for being on the call tonight. As always, if you have any additional questions, don’t hesitate to reach out to us. Have a great night.

That concludes today’s conference call. Thank you for attending. You may now disconnect.